India's First Local Currency Crypto Payment for UAE Oil: A BRICS Milestone

• India Conducts First-Ever Local Currency Payment to UAE in Oil Trade
• UAE Joins BRICS Economic Alliance
• First Transaction with India in Local Currency
• BRICS Establishes Global Push to Reduce US Dollar Dominance
• Formation of Beneficial Partnership Between India and UAE

India Conducts First-Ever Local Currency Payment to UAE in Oil Trade

In an unprecedented move for the BRICS nations, India has successfully accomplished its inaugural local currency payment to the United Arab Emirates (UAE) as part of an oil trade. This remarkable agreement allowed both nations to complete the trade using Indian rupees, having decided to discard the US dollar in bilateral transactions earlier in the year. The pact symbolizes a significant step in the economic alliances' ongoing de-dollarization strategies implemented throughout the current year.

UAE Joins BRICS Economic Alliance

The UAE is one of five countries that were accepted into the BRICS alliance during its annual summit in 2023, alongside Saudi Arabia, Egypt, Iran, and Ethiopia. The BRICS economic alliance has been significantly invested in expanding its global influence throughout 2023. A considerable part of this strategy involves reducing Western impact in global trade.

First Transaction with India in Local Currency

As part of this initiative, two of its members have partnered on a deal to reduce their reliance on the US dollar in bilateral transactions. India, a BRICS nation, has now successfully completed the first transaction of this agreement. The recent oil deal with the UAE was finalized using local currency payment by India. This transaction, settled in rupees, forms part of the $157.5 billion that India has expended on imported oil.

BRICS Establishes Global Push to Reduce US Dollar Dominance

This step not only signifies the global efforts by the BRICS alliance and its individual nations to reduce the dominance of the US dollar but also enhances the significance of the rupee as a trade settlement currency. In 2022, the Reserve Bank of India launched an initiative permitting importers to acquire goods in rupees, while exporters receive payment in the same currency.

Formation of Beneficial Partnership Between India and UAE

The bilateral trade is among the initial transactions under what is expected to be a rewarding partnership between India and the UAE. The UAE is slated for official inclusion in the BRICS alliance in 2024, following its invitation in August of the current year. The two nations are anticipated to continually strategize on improving trade opportunities and economic diversification in response to the evolving global power dynamic.

Edited by Jonathan Stoker